Sorry, but you are a broker's worst nightmare... and how to fix it

Sorry, but you are a broker's worst nightmare... and how to fix it

Consider this scenario:

You run a small shop specializing in custom, complex used machinery. It's a modestly successful business, but keeping it afloat is a serious grind. Service is the key to selling the machines, but your lifeblood is acquiring the best in-demand machines. When you have those, selling becomes much easier.

Enter Nick, a young MIT-trained mechanical engineer. He frequently visits your shop, asking incredibly detailed questions about each product. He wants to know how each machine works, how and by whom each component was made, its origins, any problems it's had, and so on. Many of his questions require you to go back to suppliers, risking irritation. Some questions require extensive research, if they can be answered at all. Nick's constant demands for your attention pull you away from other customers. He's been coming in for over a year without buying anything—from you or anyone else. Despite seeming committed and interested, you question whether he can even afford a purchase.

As the shop owner, how would you handle Nick?

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If you haven’t figured it out yet, the shop owner is the broker, and you are Nick.

Many searchers, without realizing it, are a broker's worst nightmare. They can be picky, needy, uninformed, under-capitalized, under-resourced, and inexperienced. From the broker's perspective, such searchers offer little value beyond a remote chance of a successful transaction. Brokers quickly catch on and treat these searchers accordingly. Consequently, many searchers deem the broker channel ineffective or incompetent. Some experienced searchers even advise beginners to avoid brokers altogether, suggesting off-market deals are better.

This is terrible advice.

To understand why, let’s delve into the world of business brokers.

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An excellent broker once told me that buyer-focused brokers starve. For brokers, sellers are where it’s at. Sellable businesses are the scarce commodity driving the market. A typical buyer purchases only one business in their lifetime. The idea of going full-cycle (helping someone buy, then sell years later) is nice but rare. It's too remote to motivate a broker. Seller satisfaction, on the other hand, drives referrals, which create future business. Thus, brokers prioritize the seller’s experience over the buyer’s. This reality limits the quality of service a broker can offer buyers.

So, complain about brokers all you want—you may be justified based on your treatment. "My money’s no good here? This broker is an idiot." But that’s a feeling, not a fact. It’s easy to fall into self-victimization when a broker ghosts you. The broker’s process isn’t optimized for you, nor should it be. They’ve assessed you as a bad customer, likely correctly. You need to rethink your approach to enhance the value you contribute to their process. This is the only way to change how they treat you.

Your broker image is mostly determined by the value you bring as a potential buyer, not by your likability or frequent meeting requests. Brokers aren’t looking for more nice people to help them pass the day. As a buyer, you should avoid nightmare customer behaviors as you refine your evaluation and underwriting process. For example, trim your initial question lists before sending them, and ensure you know what risks you’re underwriting with each question. Ask questions minimally intrusively. This helps avoid creating negative buyer experiences.

Avoiding the broker blacklist is critical, but you can do much better. Searchers and brokers can build highly productive, symbiotic relationships. Searchers gain pipeline access, market intelligence, transaction experience, and seller perspectives from brokers. In exchange, brokers need buyers who offer more than a remote chance of a one-time sale. They crave buyers who, even if they don’t buy, help sell the business to someone else.

To start building this partnership, introduce yourself in the context of a specific deal the broker is marketing. Position yourself as a potential buyer who offers value and a network, regardless of the initial deal outcome. Keep your sales pitch tight to avoid losing your message. Once you receive a deal prospectus, review it quickly and send feedback or observations. It’s okay to send an initial perspective and request more time to think. It’s also okay to disqualify it, but offer something useful. A simple "pass" is polite but useless. A succinct message rich with feedback and suggestions is most helpful. For example, "This isn't a fit for us because [X], but I know two people who might consider. I’ve sent this to them, and they'll reach out if interested. The best buyer for this might be [Z]. I know someone you could talk to if you want to test the idea." Honest feedback from real potential buyers helps brokers adjust their marketing and earn credibility with sellers.

Executing this is tough, especially if you’re evaluating many deals across multiple industries or geographies. Providing actionable suggestions to brokers requires deep networking within your regions and industries. It also requires extra effort in writing clear and concise feedback. This takes time and commitment but gets easier with practice. Meeting other searchers and tracking what they’re looking for can help. These interactions expand your perspective and hone your search strategy, making you more valuable to your broker network. Just be careful not to send your new broker friend five tire kickers like Nick!

Lastly, documenting feedback can be helpful. Writing your observations and feedback in a way others can understand (and object to) brings clarity and discipline to your thought process. It teaches you more than a simple "no" would. It also allows the broker to check the logic and correct any misinterpretations. If it was worth inquiring about, it’s worth writing down the decision to ensure accuracy. You might be surprised!